Senegal v. Reliance Standard Life Insurance Company
2:16-cv-01961
E.D. La.Jan 17, 2017Background
- Tommy W. Senegal, insured under Cequel’s group long-term disability (LTD) policy issued by Reliance, stopped working Dec. 14, 2011; Reliance initially paid LTD benefits.
- SSA ALJ found Senegal disabled (through May 15, 2013) for back, knee, affective and anxiety disorders and vocational expert testimony found no jobs he could perform.
- Reliance terminated benefits Jan. 27, 2014, concluding after 24 months the policy requires inability to perform any occupation and asserting Senegal could perform sedentary work; Reliance also relied on a 24-month mental/nervous disorder limit.
- Senegal appealed; Reliance scheduled an IME (Dr. Begnaud) and later requested a functional capacity evaluation (FCE); Senegal initially refused the FCE, later submitted a FCE (July 30, 2015) and a Dec. 2, 2015 cover letter seeking reconsideration. Reliance denied the appeal Apr. 15, 2015 and refused to consider the FCE.
- Senegal sued under ERISA seeking past/future LTD benefits and attorneys’ fees; cross-motions for summary judgment were filed. District court granted Senegal’s motion to supplement the administrative record with the Dec. 2, 2015 FCE, denied his motion to strike Dr. Begnaud’s IME, denied both parties’ summary judgment motions, and remanded to the plan administrator for reconsideration within 90 days (case stayed).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dec. 2, 2015 FCE is part of the administrative record | FCE was submitted to Reliance requesting reconsideration and Reliance had reasonable time to review | Reliance refused to consider post-decision evidence | Court: FCE part of record under Vega because claimant submitted it for reconsideration and allowed time to review |
| Whether Reliance’s IME (Dr. Begnaud) should be stricken as procedurally unreasonable | IME was obtained after appeal deadline and sandbagged Senegal | Policy permits exams while claim pending; insurer may obtain IME on appeal | Court: IME properly in record; insurer may request IME during appeal (Killen) |
| Whether Reliance abused discretion in terminating benefits | Reliance ignored treating physician, SSA/VA findings, vocational expert, and FCE; decision arbitrary and not supported by substantial evidence | Reliance considered records, SSA/VA not binding, and identified sedentary jobs claimant could perform; claimant failed to prove physical limitations alone preclude all work | Court: Denied motions for judgment on record; remanded for administrator to consider FCE, address new denial ground (refusal to attend FCE), and meaningfully discuss SSA/VA findings |
| Whether claimant forfeited underpayment and other claims by not raising them administratively | Underpayment claim exists and should be considered on remand | Claim not raised administratively and therefore waived | Court: Remand appropriate to allow claimant to pursue underpayment claim before administrator |
Key Cases Cited
- Vega v. Nat’l Life Ins. Servs., 188 F.3d 287 (5th Cir. 1999) (administrative record includes evidence submitted to administrator for reconsideration)
- Killen v. Reliance Standard Life Ins. Co., 776 F.3d 303 (5th Cir. 2015) (insurer may obtain IME during appeal; ERISA does not guarantee pre-denial opportunity to rebut IME)
- Rossi v. Precision Drilling Oilfield Servs. Corp. Emp., 704 F.3d 362 (5th Cir. 2013) (failure to afford opportunity to contest new ground at administrative level undermines procedural compliance)
- Dillon v. Aon Corp., 265 F.3d 1058 (5th Cir. 2001) (when insurer raises a new reason not asserted administratively, remand is appropriate)
- Schadler v. Anthem Life Ins. Co., 147 F.3d 388 (5th Cir. 1998) (discussing remand when record lacks administrative development on new denial grounds)